KABR Management LLC

Item 5         Fees and Compensation

A. Description of Compensation.

KABR Management charges investment advisory fees (“Asset Management Fees”) to the Funds
in consideration for its investment advisory services. Such fees are generally payable monthly in
advance, depending on the Fund. Depending on the Fund, such fees are generally between 1% and
1.5% of capital commitments and/or total capital contributions and/or unreturned capital
contributions made to each Fund and/or of Net Asset Value and may vary based on the stage of
investment of the Fund. The amounts of and the terms applicable to such fees may vary by Fund
and are set forth in the Governing Documents of each Fund. Any such fees paid by the Funds are
indirectly borne by the investors in the Funds.

KABR Management is entitled to receive distributions of investment proceeds from the Funds
based on a percentage of the return on the invested capital of investors in the Funds, generally
subject to certain conditions set forth in the Governing Documents of the Funds such as the prior
return of capital to investors in such Funds and/or prior payment to investors in such Funds of a
certain rate of return on invested capital. Such distributions to KABR Management are referred to
as “Carried Interest.” For an additional discussion regarding the Carried Interest, please refer to

Item 7         Types of Clients

KABR Management provides investment advisory services to the Funds described above and not to
investors thereof. The Funds are investment entities structured as Delaware limited liability
companies and exempt from registration under the U.S. Investment Company Act of 1940, as
amended. Each investor in a Fund generally must be (i) an “accredited investor,” as defined in
Regulation D under the Securities Act, and (ii) either a “qualified purchaser,” as defined in the U.S.
Investment Company Act of 1940, as amended (the “Company Act”), or a “knowledgeable
employee,” as defined under Rule 3c-5 of the Company Act, and must meet other suitability
requirements.

The investors in the Funds may include individuals, trusts and other investment entities or business
entities, and may include, directly or indirectly, principals or other employees of KABR
Management and its affiliates.

Each Fund requires a minimum investment, which is set forth in the Fund’s Governing Documents,
and is generally $250,000. KABR Management, in its sole discretion, may accept investments that
are less than the required minimum investment set forth in the applicable Fund’s Governing
Documents.

Item 8         Method of Analysis, Investment Strategies and Risk of Loss

KABR Management provides investment advisory services to the Funds. The investment
strategies and objectives for each Fund are provided for in the Fund’s Governing Documents. In
general, these strategies, objectives and the risks related thereto are set forth below.

Primary Investment Objectives

The primary investment objective of each Fund is to acquire, operate and ultimately sell one or more
real properties (the “Properties”) located in the territory specified in the Governing Documents of
each Fund (the “Territory”). KABR Management seeks to acquire Properties for the Funds that, due to
market conditions and the financial circumstances of the owners, may be acquired at a discount to the
long-term fair market value of such Properties. Properties will be owned directly by a Fund or by joint
ventures in which a Fund is a participant. Properties may in some cases be subject to either
intermediate or long-term net leases. KABR Management may also acquire for the Funds unimproved
Properties which are incidental to the acquisition of a related, improved Property, as well as some
unimproved Property, with most if not all governmental approvals in place to erect one or more

buildings and improvements. In addition to preserving and protecting each Fund’s invested capital,
the principal objectives of each Fund are to:

   •   provide capital gains through appreciation;

   •   build up equity through the reduction of mortgage loans where they exist on Fund
       Properties; and

   •   create a stream of income from the rental income and operation of the Properties available
       for distribution to investors in the Funds.

The investment objectives set forth above represent long-term goals, and the achievement of these
objectives will depend upon a number of factors affecting market value, including, among other
things, general and local economic conditions and KABR Management’s ability to select suitable
Properties for investment and to manage such Properties successfully.

To the extent that a Fund has available funds, KABR Management tries to make real estate
investments in several Properties of different types and in various locations in an attempt to achieve
diversification and thereby minimize the effect of changes in local economic conditions and certain
other risks.